Black Hills Power won’t need a permit from state utility regulators to construct or operate a wind farm in Butte County. The Public Utilities Commission requires permits only for projects of 100 megawatts or more, and a proposed Belle Fourche-area wind farm is just 20 megawatts.

Where to draw the line at permitting has been debated at the PUC for the last few years, chairman Steve Kolbeck said. When a permit is required, PUC staff talk to landowners, study exact turbine location and hold public hearings. That doesn’t happen for the smaller projects.

“We’ve had this debate,” Kolbeck said. “You’re in it to permit anything, or you need to set a threshold of what ‘substantial generation’ is. You want companies to do smaller projects. You don’t want to create regulatory lag. It’s a balancing of landowner concerns and generation concerns and the companies’ ability to operate smoothly under a certain threshold.”

The PUC is being asked only for a ruling that the project is reasonable and cost-effective under state law governing South Dakota’s renewable energy objective. Black Hills Power has asked that that ruling come no later than Sept. 1 to allow time to complete bidding, site work and construction by next summer and put the project in service by the end of 2012.

People can comment as part of that ruling process but there likely won’t be any local public hearings held or any formal intervention in the case, Kolbeck said.

“Wind farms are generally a very smooth process,” Kolbeck said. “For the most part, landowners are happy, companies are happy… a lot of that is worked out beforehand.”

“I can only believe that it will be a huge positive for the city,” Belle Fourche Mayor Gary Hendrickson said.

The mayor said he and Teresa Schanzenbach, Belle Fourche Chamber of Commerce executive, met with Black Hills Power representatives Thursday.

“Most of all, it will put us on the map of being the first location West River for these turbines,” he said.

Hendrickson added, “This will generate numerous jobs during the construction phase and provide a couple more jobs when up and running.”

Black Hills Power announced plans Thursday to build the first commercial wind farm in western South Dakota by the end of 2012. There are 10 wind farms East River between 10.5 MW and 210 MW, along with a number of smaller projects, according to the PUC.

The PUC ruling, Kolbeck said, will “clarify whether Black Hills Power properly evaluated and determined under that rule that this wind project is reasonable and cost-effective.”

The utility can build the wind farm without that ruling, he said, but doing so it would make it a riskier investment down the road if Black Hills Power seeks PUC approval to raise customer rates to cover the cost of the investment.

“They’ve come in here for more of a financial reason than an actual operating permission,” he said.

Kolbeck said there has never been a case in the state where a proposed wind farm was not ruled reasonable and cost-effective.

“We have taken it to the commission to confirm that it’s good public policy to add this as a cost-effective resource to our generation portfolio,” Black Hills Power vice president Chuck Loomis said.

There are a number of levels of review from other state and federal agencies, utility officials said.

Butte County has no zoning ordinance. There is nothing in the county that would affect the development besides a $50 building permit per tower.

Commissioners said they may require a haul road agreement with BHP during construction in order to protect county gravel roads going into the wind farm site.

Hansen said a bentonite mining company already has a “haul road” agreement with the county in the area, and a similar agreement may be required during construction of the wind towers.

The U.S. Army Corps of Engineers must review the use because of possible impacts on wetlands. That will happen once the final design is in place, the utility said.

For the U.S. Fish and Wildlife Service, a review found no major impact to endangered species, Rogers said. The utility will have to develop an avian protection plan to show how it will minimize impact to birds.

A U.S. Department of Agriculture review found no contracts or mortgages on the land that would encumber a wind farm use.

A U.S. Department of Commerce telecommunications review found no conflict with federal microwave beams.

The Federal Aviation Administration will evaluate the towers’ locations and determine whether they will have any adverse effect on airspace for both commercial and military uses, said David Anderson, program manager in the agency’s Bismarck regional office. The agency will make recommendations about which towers need to be lighted at night for safety.

The State Historic Preservation Office found nothing significant on the site, Rogers said, and the state Natural Heritage Program cleared the site in a review of any threatened and endangered species.

The state Department of Environment and Natural Resources will permit the project to ensure no problems with erosion or soil runoff.

The permit requires the utility to develop a storm water pollution prevention plan. The agency will also oversee a temporary amendment of the landowners’ water rights permits to allow well water to be used during construction.

“The main criteria for us on the temporary permit is that it can’t interfere or adversely affect any other person’s rights for making that withdrawal,” said Eric Gronlund, engineering specialist with the DENR water rights program.

“We work hard to be a good community partner and as we work through the permit process and obtain the ruling from the PUC, we will work with all of the agencies and regulatory bodies to meet and comply with all the requirements related to the project,” Loomis said.

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